The average American household debt is $15,706, and $7,327 of it comes from credit cards alone, Nerdwallet found this year in an analysis of government data and other statistics. About 44 percent of those polled pay off their card balances monthly (good for them!), which leaves the other 56 percent holding some expensive debt.

Taboo topic

While people have a hard time dealing with debt, they also have a hard time talking about it. A poll by CreditCards.com found that Americans would rather discuss their salary, weight, politics or religion with a stranger. They found the only topic of discussion rivaling debt as a taboo was “details of your love life,” with only 19 percent willing to discuss.

And if people can’t talk about debt, maybe that’s why research shows most of us take the wrong (or at least more expensive) approach to paying it back – paying off the smallest accounts first.

There’s a more cost-effective way to do it, as we’ll explain, but both approaches require one common element: motivation. If you aren’t going to make consistently paying down debt a priority, you lose out regardless of strategy. So while there is a clear, mathematically correct approach to dealing with debt, it’s important to do what works best for you. Here are the two common approaches:

Prioritizing high-interest accounts

In this model, you make the minimum payment on every debt except the one with the highest interest rate, which is the one costing you the most money over time. For that debt, you throw in whatever you can regularly afford beyond the minimum until it’s paid off.

Once that debt’s gone, your debt-paying budget stays the same – you just shift the higher payment to the debt with the next-highest interest rate, and go on down the line.

The obvious advantage to this model is you save the most money possible over the long term. The downside: Progress may appear to be slower than it actually is. Having a large number of debts may feel more stressful even though you’re paying down the debts in the most effective way to eliminate them.

Paying off low balances first

As with the first model, you pay the minimum on all but one debt and “snowball” the payments from one debt to the next as they disappear. The difference here is that you focus on the smallest debts, allowing you to knock accounts off the list faster.

The advantage? Having fewer accounts to juggle feels good. It’s a result we can easily see: Balances shifting downward is not as impressive or obvious as a big zero. Some people need that to stay motivated. Unfortunately, this means you’re actually making slower progress on your overall debt because those big-interest accounts are accruing.

New research at Texas A&M University finds that paying off low balances first (described below) may help build motivation, although the subject needs more study, the authors say.

“[I]ndividuals increase their performance in tedious tasks when those tasks are broken down and put in ascending rather than descending order,” they write.

Is all this hard to visualize? Imagine it this way: You’re trying to bail out your sinking ship, but a bunch of creditors are standing behind you with little kiddie beach pails, pouring more water in. While it may feel good to turn and shove those guys off your boat right away, there’s a jerk with a huge bucket standing – and grinning – at the other end of the ship. You really ought to run and tackle him first.

How to decide on the best approach

The fact is, the bucket sizes are different for everybody. We all have different situations, with a number of debts of varying sizes and interest rates, and with different income levels. Fortunately, there’s a much more concrete way to figure out how to handle debt that works for everybody. Being able to plug your specific numbers in and see how much money you lose by flipping between the two methods can help decide.

It's not the usual blah, blah, blah

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